Beatrice Asks For Time

Suits, Modified Bid Delay Board Meeting

January 29, 1986|By John Gorman.

Beatrice Companies Inc. Tuesday postponed its board of directors meeting until the weekend as it continued to review the company`s alternatives following a modified takeover proposal by Kohlberg, Kravis, Roberts & Co., an investment banking company.

In a brief statement, Beatrice said it was postponing Tuesday`s previously scheduled board meeting to discuss the modified offer and instead would take up the issue at a Sunday meeting.

The company`s stock was off slightly in active trading at mid-day Tuesday.

A source close to the negotiations said one reason for the delay is that the board is trying to reach settlements in two sets of consolidated shareholder suits that were filed in the wake of the Kohlberg Kravis deal. One set of suits was filed in Illinois, where Beatrice is headquartered, and the other set in Delaware, where the firm in incorporated.

Most of the suits challenge the estimated $75 million in ``golden parachutes`` the firm is providing for 60 top executives, including nearly $25 million for the top six officials.

``It would be to the directors` advantage to have these (suits) behind them before they vote. Those (golden parachute) agreements might be trimmed a bit,`` the source said.

The sources said that intensive talks between Beatrice and Kohlberg Kravis have been going on since last Thursday.

A company spokeswoman said the board was continuing to review its alternatives with regard to the new Kohlberg Kravis proposal, under which the company would acquire Beatrice for about $6.1 billion in what would be the biggest leveraged buyout ever.

In a leveraged buyout, the debt incurred to take over a company usually is repaid with funds from operating income or the sale of assets.

The spokeswoman declined further comment. The Kohlberg Kravis spokesman in New York, Thomas Daly, declined comment.

When Beatrice announced a definitive merger agreement with Kohlberg Kravis on Nov. 14, the Chicago-based food and consumer products giant said the offer was worth $43 a share in cash and $7 a share face amount of a new class of preferred stock of the company organized to acquire Beatrice.